Drosophila factor 2, an RNA polymerase II transcript release factor, exhibits a DNA-dependent ATPase activity (Xie, Z., and Price D. H. (1997) J. Biol. Chem. 272, 31902-31907). We examined the nucleic acid requirement and found that only double-stranded DNA (dsDNA) effectively activated the ATPase. Single-stranded DNA (ssDNA) not only failed to activate the ATPase, but suppressed the dsDNA-dependent ATPase. Gel mobility shift assays showed that factor 2 formed stable complexes with dsDNA or ssDNA in the absence of ATP. However, in the presence of ATP, the interaction of factor 2 with dsDNA was destabilized, while the ssDNAfactor 2 complexes were not affected. The interaction of factor 2 with dsDNA was sensitive to increasing salt concentrations and was competed by ssDNA. In both cases, loss of binding of factor 2 to dsDNA was mirrored by a decrease in ATPase and transcript release activity, suggesting that the interaction of factor 2 with dsDNA is important in coupling the ATPase with the transcript release activity. Although the properties of factor 2 suggested that it might have helicase activity, we were unable to detect any DNA unwinding activity associated with factor 2.A common mechanism employed to control the potential of RNA polymerase II to synthesize full-length transcripts is through an early elongation block. This process, referred to as abortive elongation or premature termination has been observed in various transcription systems (1-5), as well as in our study of Drosophila RNA polymerase II transcription (6, 7). We observed that two distinct classes of complexes were formed after initiation. The predominant class undergoes abortive elongation which only gives rise to short transcripts, whereas the second class overcomes early blocks and carries out productive elongation. Based on our results, a model has been proposed for the control of elongation by RNA polymerase II which highlights the function of both negative and positive factors (6, 7). According to the model, the action of negative transcription elongation factors (N-TEF) 1 was responsible for the abortive elongation. The transition from abortive elongation to productive elongation was mediated by the action of positive transcription elongation factors (P-TEF). P-TEFb, one of the components of P-TEF, has recently been purified and identified as a 5,6-dichloro-1--D-ribofuranosylbenzimidazole-sensitive kinase that can phosphorylate the C-terminal domain (CTD) of the largest subunit of RNA polymerase II (8, 9) and is required for Tat-transactivation of transcription from the HIV-LTR (10, 11).One of the components of N-TEF, factor 2, was originally identified due to its ability to suppress the appearance of shorter than full-length transcripts during transcription in vitro (12). Factor 2 is a 154-kDa protein that associates stably with early elongation complexes under low salt conditions, but dissociates in 1 M KCl (13). Factor 2 causes the release of transcripts by RNA polymerase II in an ATP-dependent manner and results in premature termina...